Eli Lilly wins US trade secret arbitration

Covington & Burling has won a key life sciences arbitration in the United States for pharmaceutical g...

Covington & Burling has won a key life sciences arbitration in the United States for pharmaceutical giant, Eli Lilly, defeating a USD 1.39 billion claim.

The claim, brought by French biotech company, Adocia, who instructed Jones Day, alleged that Eli Lilly had misappropriated trade secrets and confidential information as regards diabetes treatment, in the form of fast-acting insulin.

The claim was heard by an unnamed three-member panel of arbitrators under American Arbitration Association rules, which was notable both for the complexity of submissions and the length of the hearing, with the tribunal finding in Eli Lilly’s favour, upholding the pharmaceutical giant’s record of independent development in biotechnology matters.

In a statement, Michael Harrington, Lilly’s general counsel said the company looked “forward to putting this matter behind us and focusing on the important work of discovering and developing new treatments for people living with diabetes”.

Covington partner and lead counsel Marney Cheek, said in her own statement, that she was pleased the tribunal acknowledged “the innovative and independent work of Lilly scientists”, saying the firm was “delighted with the outcome”.

Cheek, together with Harrington and his team, worked with partners Clara Shin and Jeffrey Davidson in San Francisco and Megan Keane and Miguel López Forastier in Washington, DC, together with associates in the San Francisco and Palo Alto offices.

A previous award, made by the tribunal in 2018 for Eli Lilly to pay USD 11.6 million to the claimants in respect of a disputed contractual milestone payment still stands.

Greg Lanier, of Jones Day’s Silicon Valley office, together with fellow partners, Randy Kay, of San Diego, and Andrea Weiss Jeffries, in Los Angeles, acted in that instance.

In a statement, Gérard Soula, chairman and chief executive officer of Adocia, said the company was “extremely surprised and disappointed by the tribunal’s decision”, but added that it believed it was the company’s “responsibility to defend the rights of our company and shareholders”, noting that it would “benefit from the award from the first arbitration ruling” in developing further pipeline products.